The first part of The Ascent of Money is quite excellent. Niall
Ferguson explains the history of how money and finance came to be what
it is today. Ferguson tells it like it is and was without sugar
coating. He writes clearly and well. He speaks about places with
authority, because he has done his homework. This book is well
researched. I also like the personal connections he makes with the
material.

At least, that's what happened in the first half of the book. Once
Ferguson moves to the more direct causes of the crisis of 2008, I find
his facts are lacking and his reasoning speculative.

[k470] Jews, too, were not supposed to lend at interest. But there was
a convenient get-out clause in the Old Testament book of Deuteronomy:
'Unto a stranger thou mayest lend upon usury; but unto thy brother
thou shalt not lend upon usury.' In other words, a Jew might
legitimately lend to a Christian, though not to another Jew. The price
of doing so was social exclusion.

[k801] Since 1898, it has been every American's right to file for
Chapter VII (liquidation) or XIII (voluntary personal
reorganization). Rich and poor alike, people in the United States
appear to regard bankruptcy as an 'unalienable right' almost on a par
with 'life, liberty and the pursuit of happiness'. The theory is that
American law exists to encourage entrepreneurship - to facilitate the
creation of new businesses. And that means giving people a break when
their plans go wrong, even for the second time, thereby allowing the
natural-born risk-takers to learn through trial and error until they
finally figure out how to make that million.

[k1028] Rothschild family rich - rich enough to build forty-one
stately homes all over Europe, among them Waddesdon Manor in
Buckinghamshire, which has been restored in all its gilded glory by
the 4th Lord Rothschild, Nathan's great-great-great-grandson. His
illustrious forebear, according to Lord Rothschild, was 'short, fat,
obsessive, extremely clever, wholly focused . . . I can't imagine he
would have been a very pleasant person to have dealings with.' His
cousin Evelyn de Rothschild takes a similar view. 'I think he was very
ambitious,' he says, contemplating Nathan Rothschild's portrait in the
boardroom at the offices of N. M. Rothschild in London's St Swithin's
Lane, 'and I think he was very determined. I don't think he suffered
fools lightly.'

[k1045] It was this phenomenal drive, allied to innate financial
genius, that propelled Nathan from the obscurity of the Frankfurt
Judengasse to mastery of the London bond market. Once again, however,
the opportunity for financial innovation was provided by war.

[k1050] Bonaparte. The Battle of Waterloo was the culmination of more
than two decades of intermittent conflict between Britain and
France. But it was more than a battle between two armies. It was also
a contest between rival financial systems: one, the French, which
under Napoleon had come to be based on plunder (the taxation of the
conquered); the other, the British, based on debt. Never had so many
bonds been issued to finance a military conflict. Between 1793 and
1815 the British national debt increased by a factor of three, to GBP 745
million, more than double the annual output of the UK economy.

[k1056] According to a long-standing legend, the Rothschild family
owed the first millions of their fortune to Nathan's successful
speculation about the effect of the outcome of the battle on the price
of British bonds. In some versions of the story, Nathan witnessed the
battle himself, risked a Channel storm to reach London ahead of the
official news of Wellington's victory and, by buying bonds ahead of a
huge surge in prices, pocketed between GBP 20 and GBP 135 million. It was a
legend the Nazis later did their best to embroider. In 1940 Joseph
Goebbels approved the release of Die Rothschilds, which depicts an
oleaginous Nathan bribing a French general to ensure the Duke of
Wellington's victory, and then deliberately misreporting the outcome
in London in order to precipitate panic selling of British bonds,
which he then snaps up at bargain-basement prices. Yet the reality was
altogether different. Far from making money from Wellington's victory,
the Rothschilds were very nearly ruined by it. Their fortune was made
not because of Waterloo, but despite it.

[k1108] Not so for the Rothschilds. No doubt it was gratifying for
Nathan Rothschild to receive the news of Napoleon's defeat first,
thanks to the speed of his couriers, nearly forty-eight hours before
Major Henry Percy delivered Wellington's official despatch to the
Cabinet. No matter how early it reached him, however, the news was
anything but good from Nathan's point of view. He had expected nothing
as decisive so soon. Now he and his brothers were sitting on top of a
pile of cash that nobody needed - to pay for a war that was over. With
the coming of peace, the great armies that had fought Napoleon could
be disbanded, the coalition of allies dissolved.

[k1114] But there was one possible way out: the Rothschilds could use
their gold to make a massive and hugely risky bet on the bond
market. On 20 July 1815 the evening edition of the London Courier
reported that Nathan had made 'great purchases of stock', meaning
British government bonds. Nathan's gamble was that the British victory
at Waterloo, and the prospect of a reduction in government borrowing,
would send the price of British bonds soaring upwards. Nathan bought
more and, as the price of consols duly began to rise, he kept on
buying. Despite his brothers' desperate entreaties to realize profits,
Nathan held his nerve for another year. Eventually, in late 1817, with
bond prices up more than 40 per cent, he sold. Allowing for the
effects on the purchasing power of sterling of inflation and economic
growth, his profits were worth around 600 million today. It was one
of the most audacious trades in financial history, one wich snatched
financial victory from the jaws of Napoleon's military defeat.

[k1850] According to Law, confidence alone was the basis for public
credit; with confidence, banknotes would serve just as well as
coins. 'I have discovered the secret of the philosopher's stone, he
told a friend, 'it is to make gold out of paper.' The Duke demurred,
saying '

[k1847] Considered. His central idea was that the new bank should
issue interest-bearing notes that would supplant coins as currency. It
was rejected by the parliament shortly before the Act of Union with
England. Disappointed by his homeland, Law travelled to Turin and in
1711 secured an audience with Victor Amadeus II, Duke of Savoy. In The
Piedmont Memorials, he again made the case for a paper
currency. According to Law, confidence alone was the basis for public
credit; with confidence, banknotes would serve just as well as
coins. 'I have discovered the secret of the philosopher's stone, he
told a friend, 'it is to make gold out of paper.' The Duke demurred,
saying 'I am not rich enough to ruin myself.'

[k2162] First, too little was done to counteract the credit
contraction caused by banking failures. This problem had already
surfaced several months before the stock market crash, when commercial
banks with deposits of more than $80 million suspended
payments. However, it reached critical mass in November and December
1930, when 608 banks failed, with deposits totalling $550 million,
among them the Bank of United States, which accounted for more than a
third of the total deposits lost. The failure of merger talks that
might have saved the Bank was a critical moment in the history of the
Depression.

[k2168] However, the Fed made matters worse by reducing the amount of
credit outstanding (December 1930-April 1931). This forced more and
more banks to sell assets in a frantic dash for liquidity, driving
down bond prices and worsening the general position.

[k2355] The history of risk management is one long struggle between
our vain desire to be financially secure - as secure as, say, a
Scottish widow - and the hard reality that there really is no such
thing as 'the future', singular. There are only multiple,
unforeseeable futures, which will never lose their capacity to take us
by surprise.

[k2359] In the Westerns I watched as a boy I was fascinated by ghost
towns, short-lived settlements that had been left behind by the fast
pace of change on the American frontier. It was not until I went to
New Orleans in the wake of Hurricane Katrina that I encountered what
could very well become America's first ghost city.

[k2387] 'Dickie' Scruggs first hit the headlines in the 1980s, when he
represented shipyard workers whose lungs had been fatally damaged by
exposure to asbestos, winning a $50 million settlement. But that was
small change compared with what he later made the tobacco companies
pay: over $200 billion to Mississippi and forty-five other states as
compensation for Medicaid costs arising from tobacco-related
illnesses. The case (immortalized in the film The Insider) made
Scruggs a rich man. His fee in the tobacco class action is said to
have been $1.4 billion, or $22,500 for every hour his law firm worked.

[k2414] Total non-insured damages arising from hurricanes in 2005 are
likely to end up costing the federal government at least $109 billion
in post-disaster assistance and $8 billion in tax relief, nearly three
times the estimated insurance losses. According to Naomi Klein, this
is symptomatic of a dysfunctional 'Disaster Capitalism Complex', which
generates private profits for some, but leaves taxpayers to foot the
true costs of catastrophe. In the face of such ruinous bills, what is
the right way to proceed? When insurance fails, is the only
alternative, in effect, to nationalize all natural disasters -
creating a huge open-ended liability for governments?

[k2428] The US Army Corps of Engineers described Hurricane Katrina as
a 1-in-396 storm, meaning that there is a 0.25 per cent chance of such
a large hurricane striking the United States in any given year. A
rather different view was taken by the company Risk Management
Solutions, which judged a Katrina-sized hurricane to be a
once-in-forty-years event just a few weeks before the storm
struck. These different assessments indicate that, like earthquakes
and wars, hurricanes may belong more in the realm of uncertainty than
of risk properly understood. Such probabilities can be calculated with
greater precision for most of the other risks that people face mainly
because they are more frequent, so statistical patterns are easier to
discern.

These statistics seem pretty accurate to me. What I like is the
comparison of the forecast and ex facto values for Katrina-like
disasters.

[k2434] The equivalent figure for death due to a fire in a building is
1 in 1,358. The odds of the average American being shot to death are 1
in 314. But he or she is even more likely to commit suicide (1 in
119); more likely still to die in a fatal road accident (1 in 78); and
most likely of all to die of cancer (1 in 5).

It would be good to know more about the shadow side of the
Chilean pension system and more about social conformism. Is Chile more
like Japan or Britain? Does it work because the country is small, viz
Switzerland?

[k2858] There is a shadow side to the system, to be sure. The
administrative and fiscal costs of the system are sometimes said to be
too high.

America is unique in many ways, including a high degree of
medical innovation and entrepreneurialism. I am not convinced
by the jump from Chilean pensions to American healthcare. The two
are quite unrelated, because Chile is a small, relatively homogoneous
country and the US is neither.

[k2878] But no amount of reform could insulate the system from the
ageing of the American population and the spiralling cost of private
health care.

These numbers are in stark contrast to actuarials Ferguson
provided earlier. You cannot predict the probability of an event
happening before anything of its kind has happened. This is why
financial disasters like Madoff, Enron, etc. are unpredictable. You
can neither predict the scale (bio, nuclear, airplane, ...) nor the
time/place (Mumbai, London, Oklahoma City, ...). What you can know is
that something is going to happen, some time, and the Boy Scout's
motto applies at all times.

[k2932] According to Graham Allison, of Harvard University's Belfer
Center, 'if the US and other governments just keep doing what they are
doing today, a nuclear terrorist attack in a major city is more likely
than not by 2014'. In the view of Richard Garwin, one of the designers
of the hydrogen bomb, there is already a ' per cent per year
probability of a nuclear explosion with American cities and European
cities included'. Another estimate, by Allison's colleague Matthew
Bunn, puts the odds of a nuclear terrorist attack over a ten-year
period at 29 per cent.

[k2947] In both cases, the US federal government had to step in to
help private insurers meet their commitments, providing emergency
federal terrorism insurance in the aftermath of 9/11,

This is another example of a successful government enterprise
(earlier Ferguson cited US government insurance during WWII). It's
unreasonable to compare disaster relief the government provides with
normal insurance policiies. Insurance is a savings plan, and
government operates disaster relief with a pay-as-you-go model which
we know does not work. The point of this book thus far seems to have
been that you save for rainy days and you use credit when you get an
unexpectedly strong storm. Hurricanes in Louisiana occur yearly, and
it's important to save for them like a rainy day.

[k2949] the costs of emergency relief and reconstruction along the
coast of the Gulf of Mexico.

Citadel lost 53% in 2008. Citadel limits redemptions, which
means Griffen can overcome liquidity problems, unlike the banks which
are holding illiquid but possibly viable mortgages.
Time is Griffin's friend and not banks.

[k2957] Among them are many so-called distressed assets, which Griffin
picks up from failed companies like Enron for knock-down prices. It
would not be too much to say that Ken Griffin loves risk. He lives and
breathes uncertainty. Since he began trading convertible bonds from
his Harvard undergraduate dormitory, he has feasted on 'fat
tails'. Citadel's main offshore fund has generated annual returns of
21 per cent since 1998.87 In 2007, when other financial institutions
were losing billions in the credit crunch,

It is interesting at this point in the book to see the subprime
mortgages explained in great detail 9including their relation to civil
rights) and here we aren't seeing any numbers about the typical
leverage being used by hedge funds and banks.

[k3556] Hedge funds in particular had borrowed vast sums from their
prime brokers - banks - in order to magnify the returns they could
generate. The banks,

Price drops of 2.1% per quarter are fine if you have the time.
The problem is that with leverage: you can lose more than you
bet. Property is a good bet in general without leverage and given
enough time. Stocks were a good bet up until two years ago. Time and
liquidity are the factors which affect any investment.

[k3685] Financial illiteracy may be ubiquitous, but somehow we were
all experts on one branch of economics: the property market. We all
knew that property was a one-way bet. Except that it wasn't. (In the
last quarter of 2007, Glasgow house prices fell by 2.1 per cent. The
only consolation was that in Edinburgh they fell by 5.8 per cent.) In
cities all over the world,

The only reason to borrow against future earnings is if you have
an edge by buying that particular investment. Property is so
transparent that there is almost no edge. You borrow money to buy
property, because you can, since it is asset-backed. Borrowing to
increase a business's revenues makes sense as long as you can know how
that money will affect growth. Mortgages by themselves have no effect
on growth.

The other interesting point (below) is that the problem is not
that people are buying houses, rather it is that they have stopped
saving. Therefore, property as a proportion of US household
portfolios is going up due to low savings rates, not just high house
prices.

[k3695] Housing, after all, represents two thirds of the typical US
household's portfolio, and a higher proportion in other
countries. From Buckinghamshire to Bolivia, the key to financial
security should be a properly diversified portfolio of assets. 76 To
acquire that we are well advised to borrow in anticipation of future
earnings. But we should not be lured into staking everything on a
highly leveraged play on the far from risk-free property market. There
has to be a sustainable spread between borrowing costs and returns on
investment, and a sustainable balance between debt and income.

[k3711] There was a time when American crises like these would have
plunged the rest of the global financial system into recession, if not
depression. Yet at the time of writing Asia seems scarcely affected by
the credit crunch in the US. Indeed, some analysts like Jim O'Neill,
Head of Global Research at Goldman Sachs, say the rest of the world,
led by booming China, is 'decoupling' itself from the American
economy.

[k4003] There may be a lesson here for our time, too. The first era of
financial globalization took at least a generation to achieve. But it
was blown apart in a matter of days. And it would take more than two
generations to repair the damage done by the guns of August 1914.

[k4075] According to Perkins's book, The Confessions of an Economic
Hit Man, two Latin American leaders, Jaime Roldós Aguilera of Ecuador
and Omar Torrijos of Panama, were assassinated in 1981 for opposing
what he calls 'that fraternity of corporate, government, and banking
heads whose goal is global empire'. There is, admittedly, something
about his story that seems a little odd. It is not as if the United
States had lent much money to Ecuador and Panama. In the 1970s the
totals were just $96 million and $197 million, less than 0.4 per cent
of total US grants and loans. And it is not as if Ecuador and Panama
were major customers for the United States. In 1990 they accounted
for, respectively, 0.17 per cent and 0.22 per cent of total US
exports. Those do not seem like figures worth killing for. As Bob
Zoellick puts it, 'The IMF and the World Bank lend money to countries
in crisis, not countries that offer huge opportunities to corporate
America.' Nevertheless, the charge of neo-imperialism refuses to go
away. According to Nobel prize-winning economist Joseph Stiglitz, who
was chief economist at the World Bank between 1997 and 2000,
the IMF in the 1980s not only
'champion[ed] market supremacy with ideological fervour' but
also 'took a rather imperialistic view' of its role. Moreover,
Stiglitz argues, 'many of the policies that the IMF has pushed, in
particular premature capital market liberalization, have contributed
to global instability . . . Jobs have been systematically destroyed
. . . [because] the influx of hot money into and out of the country
that so frequently follows after capital market liberalization leaves
havoc in its wake . . . Even those countries that have experienced
some limited growth have seen the benefits accrue to the well-off, and
especially the very well-off.'

Even if it was the OECD what of it? The question is to me should
we be loaning money to countries at all? Should it not be left to
corporations to invest and reap the rewards of their risk? I can not
think ofa single case where the countries who made the loans have
profited from them. Certainly corporations have profited from
liberaliAtion induced by the loans, but that is precisely my point:
let those who bear the risk reap the profits.

[k4090] It was actually the Organization for Economic Cooperation and
Development that blazed the liberalizing trail, followed (after the
conversion of French socialists like Jacques Delors and Michel
Camdessus) by the European Commission and European Council. Indeed,
there was arguably a Paris Consensus before there was a Washington
Consensus (though in many ways it was building on a much earlier Bonn
Consensus in favour of free capital markets). In London, too, Margaret
Thatcher's government pressed ahead with unilateral capital account
liberalization without any prompting from the United States. Rather,
it was the Reagan administration that followed Thatcher's lead.

[k4097] Stiglitz's biggest complaint against the IMF is that it
responded the wrong way to the Asian financial crisis of 1997, lending
a total of $95 billion to countries in difficulty, but attaching
Washington Consensus-style conditions (higher interest rates, smaller
government deficits) that actually served to worsen the crisis. It is
a view that has been partially echoed by, among others, the economist
and columnist Paul Krugman.

[k4108] You seem to believe that when investors are no longer willing
to hold a government's debt, all that needs to be done is to increase
the supply and it will sell like hot cakes. We at the - no, make that
we on planet Earth - have considerable experience suggesting
otherwise. We earthlings have found that when a country in fiscal
distress tries to escape by printing more money, inflation rises,
often uncontrollably . . . The laws of economics may be different in
your part of the gamma quadrant,

[k4176] The success of the Quantum Fund was staggering. If someone had
invested $100,000 with Soros when he established his second fund
(Double Eagle, the earlier name of Quantum) in 1969 and had reinvested
all the dividends, he would have been worth $130 million by 1994, an
average annual growth rate of 35 per cent . The essential differences
between the old and the new economic hit men were twofold: first, the
cold, calculating absence of loyalty to any particular country - the
dollar and the pound could both be shorted with impunity; second, the
sheer scale of the money the new men had to play with. '

This is the essence of my argument about governments. They do not
use all the tools at there disposal. Instead of intervening in the
liquidity crisis by injecting capital, governments could have fozen
time by suspending all CDS transactions. This could have been
coordinated by Western governments and simply imposed by fiat. However
the people in the current and former administrations are not thinking
outside the box. They are using the tools of capital to solve a crisis
that can only be resolved by the tools of power (government wields
power not capital). This would be a bank holiday for the rich, not the
poor.

[k4184] Yet there were limits to the power of the hedge funds. At one
level, Soros and his ilk had proved that the markets were mightier
than any government or central bank. But that was not the same as
saying that the hedge funds could always command the markets.

This is known as table limits, or more practically,
capital-at-risk limits.

[k4306] But, as John Maynard Keynes once observed, in a crisis
'markets can remain irrational longer than you can remain solvent'. In
the long term, it might be true that the world would become more like
Planet Finance, always coolly logical. Short term, it was still dear
old Planet Earth, inhabited by emotional human beings, capable of
flipping suddenly from greed to fear.

[k4338] Moreover, there is increasing scepticism that hedge fund
returns truly reflect 'alpha' (skill of asset management) as opposed
to 'beta' (general market movements that could be captured with an
appropriate mix of indices). An alternative explanation is that, while
they exist, hedge funds enrich their managers in a uniquely alluring
way. In 2007 George Soros made $2.9 billion, ahead of Ken Griffin of
Citadel and James Simons of Renaissance, but behind John Paulson, who
earned a staggering $3.7 billion from his bets against subprime
mortgages. As John Kay has pointed out, if Warren Buffett had charged
investors in Berkshire Hathaway ' and 20', he would have kept for
himself $57 billion of the $62 billion his company has made for its
shareholders over the past forty-two years. Soros, Griffin and Simons
are clearly exceptional fund managers (though surely not more so than
Buffett).

[k4347] But a quite mediocre conman could make a good deal of money by
setting up a hedge fund, taking $100 million off gullible investors
and running the simplest possible strategy: 1. He parks the $100
million in one-year Treasury bills yielding 4 per cent. 2. This then
allows him to sell for 10 cents on the dollar 100 million covered
options, which will pay out if the S&P 500 falls by more than 20 per
cent in the coming year. 3. He takes the $10 million from the sale of
the options and buys some more Treasury bills, which enables him to
sell another 10 million options, which nets him another $1
million. 4. He then takes a long vacation. 5. At the end of the year
the probability is 90 per cent that the S&P 500 has not fallen by 20
per cent,

[k4355] 6. He adds up his earnings - $11 million from the sale of the
options plus 4 per cent on the $110 million of T-bills - a handsome
return of 15.4 per cent before expenses. 7. He pockets 2 per cent of
the funds under management ($2 million) and 20 per cent of the returns
above, say, a 4 per cent benchmark, which comes to over $4 million
gross. 8. The chances are nearly 60 per cent that the fund will run
smoothly on this basis for more than five years without the S&P 500
falling by 20 per cent, in which case he makes $15 million even if no
new money comes into his fund, and even without leveraging his
positions.

This is a joke. Options are leverage. And, this particular
strategy would have yielded huge losses in just a few months after he
wrote this. By holding such large positions in a single leveraged
investment, he would have forced the same type of "correlation" he
pointed out that caused the LTCM debacle.

[k4504] As Frank Knight argued in 1921, 'Uncertainty must be taken in
a sense radically distinct from the familiar notion of Risk, from
which it has never been properly separated . so far different from an
unmeasurable one that it is not in effect an uncertainty at all.' To
put it simply, much of what happens in life isn't like a game of
dice. Again and again an event will occur that is 'so entirely unique
that there are no others or not a sufficient number to make it
possible to tabulate enough like it to form a basis for any inference
of value about any real probability . . .' The same point was
brilliantly expressed by Keynes in 1937. 'By "uncertain" knowledge,'
he wrote in a response to critics of his General Theory, . . . I do
not mean merely to distinguish what is known for certain from what is
only probable.

[k4511] The expectation of life is only slightly uncertain. Even
the weather is only moderately uncertain. The sense in which I am
using the term is that in which the prospect of a European war is
uncertain, or . . . the rate of interest twenty years hence
. . . About these matters there is no scientific basis on which to
form any calculable probability whatever. We simply do not know.

[k4525] As we have seen, all financial institutions are at the mercy
of our innate inclination to veer from euphoria to despondency; our
recurrent inability to protect ourselves against 'tail risk'; our
perennial failure to learn from history. In a famous article,

[k4539] Other experiments show that we also succumb too readily to
such cognitive traps as: 1. Availability bias, which causes us to base
decisions on information that is more readily available in our
memories, rather than the data we really need; 2. Hindsight bias,
which causes us to attach higher probabilities to events after they
have happened (ex post) than we did before they happened (ex ante);
3. The problem of induction, which leads us to formulate general rules
on the basis of insufficient information; 4. The fallacy of
conjunction (or disjunction), which means we tend to overestimate the
probability that seven events of 90 per cent probability will all
occur, while underestimating the probability that at least one of
seven events of 10 per cent probability will occur; 5. Confirmation
bias, which inclines us to look for confirming evidence of an initial
hypothesis, rather than falsifying evidence that would disprove it;
Contamination effects,

[k4549] The affect heuristic, whereby preconceived value-judgements
interfere with our assessment of costs and benefits; 8. Scope neglect,
which prevents us from proportionately adjusting what we should be
willing to sacrifice to avoid harms of different orders of magnitude;
Overconfidence in calibration, which leads us to underestimate the
confidence intervals within which our estimates will be robust
(e.g. to conflate the 'best case' scenario with the 'most probable');
and Bystander apathy, which inclines us to abdicate individual
responsibility when in a crowd.

Death is missing in financial systems. There is no ultimate
test. Replication in financial systems is not subject to accidental
mutation. Changes are by design. This essence of evolution is
totally missing from financial systems.

[k4584] A long-run historical analysis of the development of financial
services also suggests that evolutionary forces are present in the
financial world as much as they are in the natural world.

The meaning of they selfish gene is: unconscious, unintelligent,
replication with minute perturbations. Hedge fund operators are good
at self-perpetuation through self-promotion, which is not something a
gene can do.

[k4626] Broadly speaking, the law of the survival of the fittest
applies. Institutions with a 'selfish gene' that is good at
self-replication and self-perpetuation will tend to proliferate and
endure.

Evolution is an all-or-nothing theory. Either the model
applies exactly, or it cannot be called evolution, and you cannot rely
on the myriad of evidence that backs real evolution.

[k4634] The evolutionary analogy is, admittedly, imperfect.

[k4637] Indeed, because a firm can adapt within its own lifetime to
change going on around it, financial evolution (like cultural
evolution) may be more Lamarckian than Darwinian in character.

[k4639] Nevertheless, evolution certainly offers a better model for
understanding financial change than any other we have.

[k4665] In evolutionary terms, then, the financial services sector
appears to have passed through a twenty-year Cambrian explosion, with
existing species flourishing and new species increasing in number. As
in the natural world,

[k4669] What matters in evolution is not your size or (beyond a
certain level) your complexity.

Size matters tremedously. See J. B. S. Haldane's "On Being the
Right Size".

[k4670] The financial equivalent is being good at generating returns
on equity and generating imitators employing a similar business model.

What does he mean by authentically evolutionary?

[k4724] Still, I might equally well have paid homage to Charles Darwin
by calling the book The Descent of Finance, for the story I have told
is authentically evolutionary.